DailyCoin
Published May 03, 2021 04:22AM ET
Controversy Watch: Top influencers involved in scamming
Just as in every other industry, cryptocurrencies and digital assets are also susceptible to fraud. Experts have always warned about potential cryptocurrency scams. Most of these scams are usually done with altcoins in the popular pump and dump manner.
Before the launch of most altcoins, especially the newer ones, celebrities and influencers are used to create some sort of hype around the coins and to get their fans to network around the coin.
At launch, people invest in the coins and initial investors liquidate their holdings thereby leading to a price crash and sudden losses. These scams make the value of the coins and tokens worthless. Other scams occur where scammers sell fake NFTs.
Top Controversies and Scams Involving Influencers
The majority of the following controversies are highly suspicious cases, labelled by users as fraudulent.
1. Refinable Controversy
Popular YouTube star, MrBeast was the influencer at the centre of the “Refinable Controversy”. Launched on Binance, Refinable is an NFT solution that lets users buy cryptocurrencies with its token. MrBeast is linked to the advertisement of the brand.
After the sale, users have said that they can’t sell the coins. Not only that, the price of Refinable was higher than advertised; it was meant to launch at $0.33 but launched at $4 with the price rising to $9 before falling to $2.
2. The Crypto Queen Scam
The popular OneCoin scam that exploded into the scene in the UK made people lose millions of dollars. Businesswoman Ruja Ignatova fondly called the “crypto queen” spoke about a mystery cryptocurrency that would rival bitcoin at Wembley Arena. Soon after, OneCoin exploded and a few years later, she disappeared causing investors to lose millions.
3. Safemoon Pyramid Scheme
Many experts feel the Safemoon token is a pyramid scheme because of events surrounding it. Weeks after launching, Safemoon boomed and investors were sitting on an insane amount of profit. While other sites reduce transaction fees, Safemoon hiked its transaction fees to 12%. As a result, Safemoon burned half of its tokens, redistributing the other half in a bid to encourage people to hold on to the coin. Safemoon was also pushed by influencers.
On the Flipside
4. Jay Mazini Bitcoin Scam
Popular Instagram influencer Jegara Igabara popularly known as Jay Mazini stole Bitcoin from his followers by deceiving them that he gives 5% over the market rate. He also showed himself giving cash and gift cards on the fake Instagram page.
The Effect of Scams on the Crypto Industry
Digital assets suffer when news of a scam breaks out. People who should have invested in cryptocurrencies are afraid to do so in order not to lose their money. This slows down the growth of these assets and affects market capitalization.
Furthermore, these scams make governments more offensive against cryptocurrencies and they ban exchanges to promote Centralized Finance, while hiding under the guise of protection and not wanting people to lose money.
EMAIL NEWSLETTER
Join to get the flipside of crypto
Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.
[contact-form-7] You can always unsubscribe with just 1 click.
Continue reading on DailyCoin
Written By: DailyCoin
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.